Banking News

The prospect of record low savings rates continuing is forcing many savers to review how they allocate their capital in an attempt to achieve the level of returns they have previously enjoyed. Investing in the stock market inevitably involves putting your capital at risk however there is a middle ground which continues to attract increasing interest – the structured deposit. With this in mind, we take a deeper look at this savings alternative to help understand why more and more savers are starting to see their appeal. more

With the current economic environment asking savers far more questions than it gives answers, it is good to know that there are alternatives available. We take a look at one such alternative that is proving particularly popular as savers face the harsh reality that the more traditional fixed rate savings products are failing to meet their needs. more

Millions of savers are facing the harsh realisty that there is little hope of change to interest and savings rates in the coming years. However, those with Cash ISAs do have one further option to consider – the ISA transfer. We take a closer look at why this is becoming a rising trend as well as what this could mean for those looking for the potential to improve the returns from their capital. more

With so many savers joining income investors in the hunt for high yields, being able to quickly understand and compare the numerous options available has become even more important. We therefore compare two of our most popular income investments to help understand what is driving their popularity and why they might meet your income needs. more

Savings will suffer after latest inflation rise

18 May 2010 / by Lois Avery

Savings are set to suffer even more after Inflation rose more than expected In April hitting a 17-month high.

The Office for National Statistics said consumer prices rose to 3.7pc last month compared to the expected 3.5 per cent. Inflation was well above the government’s 2 per cent target in March at 3.4 per cent.

The Bank of England will now have to write to the new Chancellor, George Osborne, explaining why inflation is still more than 1 percentage point above the government's target.

The rise is thought to have been driven by big rises in tax on alcohol and tobacco, as well as women's clothing and food prices.

Struggling savers will now find it even more difficult to see a return on their investments.

According to moneysupermarket.com, £206 will have been wiped off the value of £30,000 savings in the last five months and basic rate taxpayers now need a to find an account paying 4.63 per cent, while higher rate taxpayers need an account paying 6.17 per cent to break even.

Kevin Mountford, head of banking at moneysupermarket.com, said: "There's no denying that current inflation figures and low interest rates are having huge impact on customers' savings. There is a danger that many will do nothing because of the belief that there is little point, but this is not the time to be apathetic.

“Yes, it's getting harder to earn a positive return on your savings, but rather than sitting back and doing nothing, it is more important than ever for savers to proactively seek the best returns possible on their money.”

He has urged savers to use their tax free ISA allowances, which increased last month to £5,100 for cash savings in order to offset some of the affects of inflation.

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